-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S6/zMJm2Ce1ApYSVQsB/e/DT+itzH78Hi9tI4LBn4FVdl3XDG3+WxmWurNGm29Bx /ujGGB20qNhR3gQjacNC+g== 0000912057-96-004740.txt : 19960320 0000912057-96-004740.hdr.sgml : 19960320 ACCESSION NUMBER: 0000912057-96-004740 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960319 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUE LINE INC CENTRAL INDEX KEY: 0000717720 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 133139843 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-11306 FILM NUMBER: 96536166 BUSINESS ADDRESS: STREET 1: 220 E 42ND ST CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2129071500 10-Q/A 1 10-Q/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q/A QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended January 31, 1996 Commission file number 0-11306 ------- VALUE LINE, INC. ---------------- (Exact name of registrant as specified in its charter) New York 13-3139843 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 220 East 42nd Street, New York, New York 10017-5891 - ------------------------------------------------------------------------------ (address of principal executive offices) (zip code) Registrant's telephone number including area code (212) 907-1500 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 12, 1996 ----- ----------------------------- Common stock, $.10 par value 9,976,975 Shares ---------------- Part I - Financial Information Item 1. Financial Statements Value Line, Inc. Consolidated Balance Sheets (in thousands, except share amounts)
Jan. 31, Apr. 30, 1996 1995 ---------------------- Assets Current Assets: Cash and cash equivalents (including short term investments of $41,262 and $43,608, respectively) $41,926 $45,026 Trading securities 59,082 48,187 Short term securities available for sale 39,538 39,099 Accounts receivable, net of allowance for doubtful accounts of $419 and $350, respectively 2,200 3,348 Receivable from affiliates 2,040 1,641 Prepaid expenses and other current assets 2,343 1,416 ---------------------- Total current assets 147,129 138,717 Long term securities available for sale 153,050 118,013 Property and equipment, net 12,214 7,922 Goodwill, net 337 346 ---------------------- Total assets $312,730 $264,998 ========= ========= Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $7,931 $6,358 Securities sold under agreements to repurchase 36,994 36,994 Accrued salaries 990 1,466 Dividends and interest payable 2,077 534 Accrued taxes payable 5,638 3,054 ---------------------- Total current liabilities 53,630 48,406 Unearned revenue 40,729 36,789 Deferred income taxes 8,993 4,806 Deferred charges 1,600 1,808 Shareholders' Equity: Common stock, $.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares 1,000 1,000 Additional paid-in capital 944 940 Retained earnings 189,881 163,101 Treasury stock, at cost (23,025 shares on 1/31/96, 24,650 shares on 4/30/95) (443) (474) Unrealized gain on securities, net of taxes 16,396 8,622 ---------------------- Total shareholders' equity 207,778 173,189 ---------------------- Total liabilities and shareholders' equity $312,730 $264,998 ========= =========
The accompanying notes are an integral part of these financial statements. 2 OF 11 Part I - Financial Information Item 1. Financial Statements Value Line, Inc. Consolidated Statements of Income and Retained Earnings (in thousands, except per share amounts)
Three months ended Nine months ended Jan. 31, Jan. 31, 1996 1995 1996 1995 ---------------------- ------------------ Revenues: Investment periodicals and related publications $14,869 $13,833 $42,944 $42,023 Investment management fees & svcs 6,820 5,592 19,530 17,422 Settlement of disputed securities trades --- --- 2,054 617 ---------------------- ------------------ Total revenues 21,689 19,425 64,528 60,062 ---------------------- ------------------ Expenses: Advertising and promotion 4,154 3,458 10,837 12,673 Salaries and employee benefits 5,434 4,774 15,304 14,124 Printing, paper and distribution 2,075 1,677 5,767 4,564 Office and administration 2,514 2,293 7,424 6,855 Mutual fund support expense --- --- --- 1,550 ---------------------- ------------------ Total expenses 14,177 12,202 39,332 39,766 ---------------------- ------------------ Income from operations 7,512 7,223 25,196 20,296 Income from securities transactions, net 16,096 4,366 28,698 8,467 ---------------------- ------------------ Income before taxes 23,608 11,589 53,894 28,763 Provision for taxes 9,317 4,578 21,128 11,363 ---------------------- ------------------ Net income $14,291 $7,01 $32,766 $17,400 Retained earnings, at beginning of year 177,584 152,317 163,101 145,918 Dividends declared (1,994) --- (5,986) (3,990) ---------------------- ------------------ Retained earnings, at end of period $189,881 $159,328 $189,881 $159,328 ====================== ================== Earnings per share $1.43 $0.70 $3.28 $1.74 ====================== ==================
The accompanying notes are an integral part of these financial statements. 3 OF 11 Part I - Financial Information Item 1. Financial Statements Value Line, Inc. Consolidated Statements oCash Flows (in thousands)
For the Nine months ended Jan. 31, Jan. 31, 1996 1995 ----------- ----------- Cash flows from operating activities: Net income $32,766 $17,400 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 981 1,023 Accretion of discount (439) (343) (Gains) on sale of trading securities and securities held for sale (7,505) (1,285) Unrealized (gains)/losses on trading securities (7,508) 929 Changes in assets and liabilities: Increase in unearned revenue 3,940 236 Increase/(decrease) in deferred charges (208) 1,018 Increase/(decrease) in accounts payable and accrued expenses 1,147 (1,321) Decrease in accrued salaries (476) (154) Increase/(decrease) in interest payable (452) 218 Increase/(decrease) in accrued taxes payable 2,584 (1,444) (Increase)/decrease in prepaid expenses and other current assets (927) 825 Decrease in accounts receivable 1,330 2,358 (Increase) in receivable from affiliates (399) (160) ----------- ----------- Total adjustments (7,932) 1,900 ----------- ----------- Net cash provided by operations 24,834 19,300 ----------- ----------- Cash flows from investing activities: Proceeds from sales of securities 18,085 2,000 Purchase of securities (37,581) (7,260) Proceeds from sale of trading securities 37,856 59,849 Purchase of trading securities (37,074) (52,712) Acquisition of property, and equipment, net (5,264) (956) ----------- ----------- Net cash provided by/(used in) investing activities (23,978) 921 ----------- ----------- Cash flows from financing activities: Proceeds from sale of treasury stock 35 --- Dividends paid (3,991) (5,985) Loan repayment --- (1,416) ----------- ----------- Net cash (used in) financing activities (3,956) (7,401) ----------- ----------- Net increase/(decrease) in cash and cash equivalents (3,100) 12,820 Cash and cash equivalents at beginning of period 45,026 14,330 ----------- ----------- Cash and cash equivalents at end of period $41,926 $27,150 ======== ========
The accompanying notes are an integral part of these financial statements. 4 OF 11 VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Significant Accounting Policies - Note 1: - ----------------------------------------- In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring accruals except as noted below) considered necessary for a fair presentation. This report should be read in conjunction with the financial statements and footnotes contained in the Company's annual report on Form 10-K, dated July 19, 1995 for the fiscal year ended April 30, 1995. Results of operations covered by this report may not be indicative of the results of operations for the entire year. Cash and Cash Equivalents: The Company considers all cash held at banks and invested in the Value Line money market funds with an original maturity of less than three months to be cash and cash equivalents. As of January 31, 1996 and April 30, 1995, cash equivalents included $37,605,000 and $41,503,000, respectively, invested in the Value Line money market funds. Securities Sold Under Agreements to Repurchase: The Company has entered into agreements to sell and repurchase U.S. Government Agency debt securities. The securities are recorded at market value and are included in "Short-term securities available for sale" on the Consolidated Balance Sheets. Valuation of Securities: The Company's long-term securities portfolio, which consists of shares of the Value Line Mutual Funds, and short-term securities portfolio, that the Company classifies as available for sale are valued at market value in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities. Unrealized gains and losses on these securities are reported, net of applicable taxes, as a separate component of Shareholders' Equity. Realized gains and losses on sales of the securities are recorded in earnings on trade date and are determined on the identified cost method. Trading securities, which consist of securities held by Value Line Securities, Inc., the Company's broker-dealer subsidiary, are valued at market with unrealized gains and losses included in earnings. Reclassification: Certain prior year amounts disclosed in the Consolidated Financial Statements and Notes thereto have been reclassified to conform to current year presentation. Marketable Securities - Note 2: - ------------------------------- Trading Securities: Securities held by Value Line Securities, Inc. had an aggregate cost of $44,501,000 and $40,767,000 and a market value of $59,082,000 and $48,187,000 at January 31, 1996 and April 30, 1995, respectively. 5 OF 11 VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Short-Term Securities Available for Sale: Short-term securities available for sale consists of the Company's holdings in the following securities: Federal National Mortgage Association (FNMA), floating rate notes due August 5, 1997; par value $30,325,000. Federal Farm Credit Bank (FFCB), floating rate notes due February 12, 1997; par value $10,000,000. The market value of the Company's holdings in these securities, which approximates cost, at January 31, 1996 and April 30, 1995 was $29,735,000 and $29,438,000 for the FNMA and $9,803,000 and $9,661,000 for the FFCB, respectively. These notes were purchased at a discount from their respective face values. The accretion of this discount has been included as an addition to the cost of the securities and reflected as interest income in the Consolidated Statements of Income and Retained Earnings. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities was $127,826,000 and $104,749,000 and the market value was $153,050,000 and $118,013,000 at January 31, 1996 and April 30, 1995, respectively. At January 31, 1996, gross unrealized gains on these securities of $25,224,000, net of deferred taxes of $8,828,000, were included in shareholders' equity. Realized gains and the proceeds received from sales of these securities during the nine months ended January 31, 1996 were $3,581,000 and $18,085,000, respectively. Supplemental Disclosure of Cash Flow Information - Note 3: - ---------------------------------------------------------- Cash payments for income taxes were $18,545,000 and $12,804,000 during the nine months ended January 31, 1996 and 1995, respectively. Interest payments of $2,107,000 and $1,042,000 were remitted during the nine months of fiscal 1996 and fiscal 1995, respectively. Securities Sold under Agreements to Repurchase - Note 4: - -------------------------------------------------------- The outstanding obligation of $36,994,000 at January 31, 1996 under the agreements to repurchase the Federal National Mortgage Association Floating Rate Notes due August 5, 1997 (FNMA), and Federal Farm Credit Bank Floating Rate Notes due February 12, 1997 (FFCB), stated in Note 2, mature on February 5, 1996 with respect to the FNMA ($27,899,000) and February 12, 1996 for the obligation to repurchase the FFCB securities ($9,095,000). These obligations accrue interest at the stated interest rates of 5.6%, respectively. The Company intends to refinance these obligations on a short term basis. Mutual Fund Support Expenses - Note 5: - -------------------------------------- On June 28, 1994, the Company purchased as part of its investment management operations for which it receives fee income, U.S. Government Agency notes with a market value as of that date of $38,615,000 from the Value Line Cash Fund for which it is the investment adviser, in order to maintain a $1.00 per share net asset value. In addition, as part of the same transaction the Company reimbursed the Value Line Cash Fund $1,550,000 for losses the Fund incurred on the sale which the Company may recoup in the future. 6 OF 11 VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Property and Equipment: - ----------------------- During January 1996, the Company purchased for cash an approximately 85,000 square foot warehouse facility for $4,100,000 under a newly formed subsidiary, Value Line Distribution Center, Inc. The new facility will house the distribution operations for the various Company publications and the fulfillment operations of the Compupower Corporation. The remaining building capacity will provide warehouse storage, a disaster recovery site and will provide for future business expansion. 7 OF 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations: Liquidity and Capital Resources: Value Line, Inc. (the Company) has liquid resources which are used in its business totaling $246,549,000 at January 31, 1996. In addition to $93,499,000 in working capital, the Company has long-term securities available for sale with a market value of $153,050,000, that, although classified as non-current assets are also readily marketable as the need arises. The Company has entered into agreements to sell and repurchase U.S. Government Agency debt securities included in working capital with a market value of $39,538,000 at January 31, 1996. The repurchase obligations of $36,994,000 have been entered into on a short-term basis. The securities, currently available for sale, mature during calendar year 1997 and are readily marketable should management decide to liquidate the Company's holdings and related obligations. The Company's working capital, including cash, has increased $3,188,000, and its securities available for sale, classified as long term, have increased $35,037,000 for the nine months ended January 31, 1996. During January 1996, the Company purchased under a newly formed subsidiary an approximately 85,000 square foot building located in the State of New Jersey for $4,100,000 in cash. The building will provide a central location for the Company's distribution and fulfillment operations, warehouse storage, a disaster recovery site and additional space for future business expansion. Management believes that the Company's cash and other liquid asset resources used in its business together with future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no significant borrowing requirements during fiscal 1996 other than the short term refinancing of the repurchase obligations. Results of Operations: Net income for the nine months ended January 31, 1996 of $32,766,000 or $3.28 per share was $15,366,000 or 88% higher than the prior year's net income of $17,400,000 or $1.74 per share. Net income of $14,291,000 or $1.43 per share for the third quarter of fiscal 1996 increased 104% from net income of $7,011,000 for the third quarter of fiscal 1995. Net income for the third quarter of fiscal 1996 set a new record high for earnings of any quarter in the Company's history. Net income for the nine months ended January 31, 1996 also set a new record for the earnings for any full year in the Company's history. Revenues of $64,528,000 for the nine months of fiscal 1996 increased 7% from revenues of $60,062,000 for the same period of fiscal 1995. Subscription revenues of $42,944,000 were 2% higher than revenues of $42,023,000 for fiscal 1995. Full term subscription levels to all products increased 28% from the prior year's level. The Value Line Investment Survey - Expanded Edition, introduced in the latter part of fiscal 1995, contributed in excess of $1,500,000 of revenues during the first nine months of fiscal 1996 while revenues from The Investment Survey increased over $900,000 during this period. These increases were partially offset by decreases in revenues from the print version of the Value Line Mutual Fund Survey. Revenues derived from investment management fees and services for the nine months ended January 31, 1996 of $19,530,000 were $2,108,000 or 12% higher than the level at January 31, 1995. The revenue increase was primarily a result of a 12% increase in the average annual net assets under management in Value Line mutual funds. Assets under management at January 31, 1996 increased 22% from the levels at January 31, 1995. Total revenues for the nine months ended January 31, 1996 and January 31, 1995 included proceeds of $2,054,000 and $617,000, respectively, from the settlement of a disputed securities transaction. 8 OF 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued:) Expenses for the nine months ended January 31, 1996 of $39,332,000 were 1% below the prior year's level of $39,765,000. The prior year's expenses included a one time charge of $1,550,000 in support of the Cash Fund, the majority of which already has been recouped. Advertising expenses of $10,837,000 were $1,836,000 or 14% below the prior year's level. The significant reduction in expenses was attributable to a decline in advertising for the print version of the Value Line Mutual Fund Survey while the development of a new electronic version was under commencement. Advertising expenses for The Value Line Investment Survey increased 22% while marketing expenses of $922,000 were incurred in fiscal 1996 for new products including The Value Line Fund Analyzer, The Value Line Investment Survey Expanded Edition, The No-Load Mutual Fund Advisor, The No-Load Analyzer, and the Value Line Investment Survey Condensed. Salary and employee benefit expenses of $15,304,000 for the nine months ended January 31, 1996 were 8% higher than the prior year's level of $14,124,000 as a result of filling vacant staff positions in the Data Processing and Mutual Fund divisions, additional staffing in the customer service department and the effect of a 4% general salary increase as of August 1, 1994. Office and administration expenses of $7,424,000 increased $570,000 or 8% from the prior year's level. The increases were a result of professional fees related to potential business expansion alternatives, a lawsuit in which the Company is a plaintiff and from the estimated restructure costs related to the purchase of the new facility. These increases were partially offset by a decrease in software amortization related to a decision during fiscal 1995 to replace the Company's fulfillment software. Fiscal 1995 also includes the absorption of expenses related to the establishment of two mutual funds. Income from securities transactions for the nine months ended January 31, 1996 of $28,698,000 increased $20,231,000 from the prior year's level of $8,467,000. The increase in capital gains produced by the Company's trading portfolios of $10,508,000 and the increase in capital gains distributions from the Company's mutual funds of $4,710,000 were the major contributors to the additional income. The additional capital gains during fiscal 1996 versus fiscal 1995 of $3,908,000 from the sale of equity and fixed income fund shares in connection with the Company's annual portfolio realignment also contributed to the increase in income from securities transactions. 9 OF 11 Item 14. Exhibits (a) 3. 1. -- By-laws of Value Line, Inc., as amended. 10 of 11 Value Line, Inc. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10Q report for the period ended January 31, 1996 to be signed on its behalf by the undersigned thereunto duly authorized. Value Line, Inc. (Registrant) Date: March 16, 1996 By: ----------------------------- Jean Bernhard Buttner Chairman and President Date: March 16, 1996 By: ----------------------------- Stephen R. Anastasio Corporate Controller 11 OF 11 EX-99.(A)3 2 EX-99.(A)3 BY-LAWS * OF VALUE LINE, INC. (Incorporated under the laws of New York) ----------------------- ARTICLE 1 OFFICES SECTION 1. OFFICES. The principal office shall be located in the City of New York, County of New York, State of New York. The Corporation may have offices and places of business at such other places as may be determined by the Board of Directors. ARTICLE II SHAREHOLDERS SECTION 1. PLACE OF MEETINGS. All meetings of the shareholders shall be held at such place as the Board of Directors may select. SECTION 2. ANNUAL MEETINGS. An Annual Meeting of Shareholders shall be held on such date and at such time as may be designated by resolution of the Board of Directors from time to time for the purpose of electing directors by a plurality vote and for transacting such other business as may properly be brought before the meeting. * As amended January 18, 1996 1 SECTION 3. ANNUAL ELECTION OF DIRECTORS. The annual election of directors shall be conducted by two inspectors of election, neither of whom shall be a candidate for the office of director. The inspectors shall be chosen at each annual meeting of shareholders to serve for the ensuing year and if such inspectors shall not be present at any election, the meeting may appoint others in their place. The inspectors shall be sworn faithfully to perform their duties and shall make a written certificate of the results of the election. SECTION 4. SPECIAL MEETINGS. Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of shareholders owning 25% in amount of the shares of the entire capital stock of the Corporation issued and outstanding, and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. The business transacted at all special meetings shall be confined to the object stated in the call. SECTION 5. NOTICES. Written notice of annual and special meetings of shareholders, stating the time, place and object thereof, shall be mailed, postage prepaid, at least ten days before such meeting, to each shareholder entitled to vote thereat at such address as appears on the books of the Corporation, except such as may in writing waive such notice. 2 SECTION 6. QUORUM. The holders of a majority of the shares issued and outstanding and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by law. If, however, such majority shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meetings at which the requisite amount of voting shares shall be represented, any business may be transacted which might have been transacted at the meeting as originally notified. SECTION 7. NOTICE OF SHAREHOLDER PROPOSALS. (a) At an annual meeting of shareholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting (i) by, or at the direction of, the Board of Directors or (ii) by any shareholder who complies with the notice procedures set forth in this Section of the By-Laws. For a proposal to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Chairman of the Board of Directors with a copy to the Secretary. To be timely, a shareholder's notice must be received at the principal executive offices of the Corporation, addressed to the Chairman of the Board 3 of Directors with a copy to the Secretary, not less than thirty (30) days nor more than sixty (60) days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than forty (40) days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the shareholder to be timely must be so received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. Such shareholder's notice shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business, (iii) the class and number of shares which are beneficially owned by the shareholder on the date of such shareholder notice and (iv) any material interest of the shareholder in such proposal. (b) If the Chairman of the annual meeting determines that a shareholder proposal was not made in accordance with the terms of this Section, she or he shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting. 4 ARTICLE III DIRECTORS SECTION 1. NUMBER, QUALIFICATION AND TERM. The property and business of the Corporation shall be managed by its Board of Directors, consisting of not less than three (3) nor more than fifteen (15) persons. Directors need not be shareholders. They shall be elected at the annual meeting of the shareholders, and each director shall be elected to serve until his successor shall be elected and shall qualify. SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors may elect a Chairman who shall act as chairman of all meetings of the Board. SECTION 3. VACANCIES. If the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, the remaining directors, though less than a quorum, shall choose a successor or successors who shall hold office until the next annual election and until a successor or successors have been duly elected, unless sooner displaced. SECTION 4. ADDITIONAL POWERS. In addition to the powers and authorities by these By-Laws expressly conferred upon it, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the shareholders. 5 SECTION 5. MEETINGS OF THE BOARD OF DIRECTORS. A regular meeting of the Board of Directors shall be held without notice immediately after the Annual Meeting of Shareholders at the same place at which such meeting is held, or at such other place, within or without the State of New York, as the directors shall designate; thereafter, regular meetings of the Board of Directors shall be held on five days' notice, at such time and such place as the Board of Directors shall designate. Special meetings may be held at any time upon the call of the President, and shall be called by the President or Secretary or other officer performing his duties, on the request of two directors, which request need not be in writing. Notice of special meetings shall be given by the Secretary or other officer performing his duties, orally or by telegraph or by mail. Such notice shall be given or sent or mailed not less than five days before the meeting. Meetings may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in writing, either before or after the meeting. SECTION 6. QUORUM. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law, but a less number may adjourn any meeting from time to time and the meeting may be held as adjourned without further notice. SECTION 7. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors by resolution adopted by a majority of the entire Board may designate from among its members an executive committee 6 and other committees, each consisting of three or more directors, and each of which, to the extent provided in the resolution, shall have all the authority of the Board of Directors, except that no such committee shall have authority as to the following matters: (a) The submission to shareholders of any action that needs shareholders' authorization under the Business Corporation Law. (b) The filling of vacancies in the Board of Directors or in any committee. (c) The fixing of compensation of the directors for serving on the Board of Directors or on any committee. (d) The amendment or repeal of the By-Laws, or the adoption of new By-Laws. (e) The amendment or repeal of any resolution of the Board of Directors which by its terms shall not be so amendable or repealable. The Board may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee. Each such committee shall serve at the pleasure of the Board of Directors. Regular meetings of any such committee shall be held at such time and place as shall from time to time be fixed by such committee and no notice thereof shall be necessary. Special meetings may be called at any time by any officer of the Corporation or any member of such committee. Notice of each 7 special meeting of each such committee shall be given (or waived) in the same manner as notice of a special meeting of the Board of Directors. A majority of the members of such committee shall constitute a quorum for the transaction of business and the act of a majority of the members present at the time of the vote, if a quorum is present at such time, shall be the act of the committee. Each such committee shall serve at the pleasure of the Board of Directors. SECTION 8. ACTION BY BOARD OF DIRECTORS OR COMMITTEE WITHOUT A MEETING. Any action required or permitted to be taken by the Board of Directors or by any committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee. SECTION 9. PARTICIPATION BY TELEPHONE. Any one or more members of the Board of Directors or any committee thereof may participate in a meeting of such Board of Directors or committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. SECTION 10. NOMINATION OF DIRECTORS. Only persons who are nominated in accordance with the procedures set forth in the By-Laws shall be eligible to serve as directors. Nominations of 8 persons for election to the Board of Directors may be made at a meeting of shareholders (a) by or at the direction of the Board of Directors or (b) by any shareholder who is a shareholder of record at the time of giving of notice provided for in this section who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Chairman of the Board of Directors with a copy to the Secretary. To be timely, a stockholder's notice shall be received at the principal executive offices of the Corporation, addressed to the Chairman of the Board of Directors with a copy to the Secretary, not less than thirty (30) days nor more than sixty (60) days prior to the meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than forty (40) days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the meeting was mailed or the day on which such public disclosure was made. Such shareholder's notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in 9 each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Corporation's books, of such shareholder proposing such nomination and any other shareholders known by such shareholder to be supporting such nomination, and (ii) the class and number of shares which are beneficially owned by such shareholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary that information required to be set forth in a shareholder's notice of nomination which pertains to the nominee. No person shall be eligible to serve as a director unless nominated in accordance with the procedures set forth in this By-Law. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the By-Laws, and, if she or he should so determine, she or he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section. 10 ARTICLE IV OFFICERS AND AGENTS SECTION 1. ELECTION AND APPOINTMENT. The Board of Directors, as soon as may be after each annual meeting of shareholders and election, shall choose a President of the Corporation, and from time to time shall choose one or more Vice Presidents, a Secretary and a Treasurer, and from time to time may appoint such other officers, agents and employees as it may deem proper. Any two or more offices may be held by the same person except the offices of President and Secretary. The President shall be chosen from among the directors. SECTION 2. TERM OF OFFICE. The President shall hold office unless he shall become disqualified or sooner removed by a vote of a majority of all the members of the Board, for the term of one year or until his successor shall be chosen and qualify. All other officers shall hold office at the pleasure of the Board of Directors. SECTION 3. POWERS AND DUTIES OF THE PRESIDENT. The President shall be the chief executive officer of the Corporation, and shall have the general management and superintendence of the affairs of the Corporation; he shall preside at all meetings of the shareholders; and in all cases where, and to the extent that, the duties of the other officers of the Corporation are not specially prescribed by the By-Laws, rules or regulations of the Board of Directors, the President may prescribe such duties. He shall have 11 and may exercise any and all powers and perform any and all duties pertaining to the office of President, or conferred or imposed upon the President by the By- Laws, or by the Board of Directors. Subject to such limitations as the Board of Directors may from time to time prescribe, the President shall have power to appoint and dismiss all such agents and employees of the Corporation (including any appointed by the Board) and he may deem proper, and to prescribe their duties, and subject to like limitations may from time to time, delegate to other officers of the Corporation any of the powers and duties conferred upon him by the By-Laws or by the Board of Directors. SECTION 4. ABSENCE OF DISABILITY OF THE PRESIDENT. In the absence or disability of the President, the Chairman of the Board of Directors shall perform the duties and exercise the powers of the President and shall perform such other duties, as may be prescribed by the Board of Directors. SECTION 5. POWERS AND DUTIES OF THE VICE PRESIDENTS. The Vice Presidents shall perform such duties as may be prescribed by the Board of Directors and subject thereto by the President, and shall perform such other duties as are customarily performed by the vice president of a corporation. SECTION 6. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall attend all sessions of the Board of Directors and all meetings of the shareholders, and act as Clerk thereof, and record all votes and the minutes of all proceedings in a minute book or books to be kept for that purpose, and shall perform like duties 12 for any committee of the Board when required. He shall cause to be given notice of all meetings of shareholders and directors and shall perform such other duties as pertain to his office. He shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, affix it when required to any instrument. SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall have the custody of all the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. SECTION 8. POWERS AND DUTIES OF OTHER OFFICERS. All other officers shall have such duties and exercise such powers as generally pertain to their respective offices as well as such duties and powers as from time to time may be prescribed by the President or the Board of Directors. 13 ARTICLE V SHARES AND SHARE CERTIFICATES SECTION 1. TRANSFERS. The shares of the Corporation shall be transferable only on the books of the Corporation. SECTION 2. CERTIFICATES REPRESENTING SHARES. The shares of the Corporation shall be represented by certificates signed by the Chairman or a Vice-Chairman of the Board of Directors or the President or a Vice-President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation, and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. Shares shall be transferable in the manner provided by law and in the By-Laws. 14 ARTICLE VI FINANCE SECTION 1. RESERVES. Before making any distribution of profits there may be set aside out of the net profits of the Corporation such sum or sums as the directors from time to time in their absolute discretion deem expedient as a reserve fund to meet contingencies, or for equalizing dividends, or for maintaining any property of the Corporation, or for any other purpose, and any profits of any year not distributed as dividends shall be deemed to have been thus set apart until otherwise disposed of by the Board of Directors. SECTION 2. CHECKS. The moneys of the Corporation shall be deposited in the name of the Corporation in such bank or banks or trust company or trust companies as the Board of Directors shall designate, and shall be drawn out only by check signed by such persons as may be designated from time to time by resolution of the Board of Directors. SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall begin on May 1st and end April 30th of each year, unless otherwise provided by the Board of Directors. ARTICLE VII CORPORATE SEAL SECTION 1. SEAL. The seal of the Corporation shall be circular in form and contain the name of the Corporation, the year of its organization and the words, "Corporate Seal, New York." 15 ARTICLE VIII NOTICE SECTION 1. NOTICE. Whenever under the provisions of these By-Laws notice is required to be given to any director, officer or shareholder, it shall not be construed to mean personal notice, but such notice may be given in writing by depositing the same in a post office or letter box, in a post-paid, sealed wrapper, addressed to such shareholder, officer or directors, at such address as appears on the books of the Corporation, or in default of other address to such shareholder at the General Post Office in the City of New York, and such notice shall be deemed to have been given at the time when the same was thus mailed. SECTION 2. WAIVER OF NOTICE. Any shareholder, officer or director may waive any notice required to be given under these By-Laws. ARTICLE IX AMENDMENT OF BY-LAWS SECTION 1. AMENDMENTS. These By-Laws may be amended by vote of a majority of the shareholders entitled to vote at any annual meeting, or at any special meeting of shareholders called for that purpose or by a vote of a majority of directors entitled to vote at any annual meeting, or at any special meeting of directors called for that purpose. Date: January 18, 1996 16 EX-27 3 EX-27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS 1,000 9-MOS APR-30-1996 MAY-01-1995 JAN-31-1996 41,926 98,620 4,659 (419) 0 147,129 18,546 (6,332) 312,730 53,630 0 0 0 1,000 206,778 312,730 42,944 64,528 0 39,332 0 0 0 53,894 21,128 32,766 0 0 0 32,766 3.28 0
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